… as working group plants code operational rules

The Code Working Group (CWG), set up this month to landscape the new incoming financial advisory regime, has laid the groundwork for its own one-year growth plan.

In a paper published last week, the CWG will oversee the development of a new adviser code of conduct – due to take root in August 2018 – that will shift from the current “occupational” model to a “service” focus.

The revised scope of the adviser code, set to go live under the Financial Services Legislation (FSL) delivered to Parliament last month is also “now able to differentiate types of advice, product or other circumstances”, the CWG paper says.

An enlarged adviser code of conduct will further need to take into account “purposive requirements to improve availability and quality of advice (potentially contrary objectives)”.

During its code rewriting process the CWG – headed by Angus Dale-Jones, former supervision director Securities Commission (the FMA forerunner organisation) – will refer directly to four other groups: the current Code Committee; the Financial Advisers Disciplinary Committee; the Skills Organisation; and, “relevant overseas bodies” including the Australian Securities and Investments Commission (ASIC).

Unlike the current Code Committee, however, the CFG will consult directly to the FMA during the year of redrafting.

“The CWG is accountable directly to the Minister, has a secretariat provided by MBIE [Ministry of Business, Innovation and Employment], and operates independently of the regulator,” the paper says. “However, the CWG is required to consult with FMA, not least because the code is pivotal to the FMA’s licensing and supervision processes”.

According to the paper, the ambit of the new code will extend well beyond its current borders to include “much of the financial services industry”.

The CWG will embark on a range of formal consultations, roadshows, focus groups, and online communications in October or November this year prior to releasing a “preliminary draft code” for comment by April 2018 at the latest.